Fiscal Policy in Colombia and Prospective Analysis After the 2008 Financial Crisis

22 Pages Posted: 15 Jan 2012

Date Written: March 25, 2010

Abstract

The purpose of this study is twofold: First, it provides an empirical characterization of fiscal policy in Colombia over the last decades, by assessing the three most relevant macroeconomic factors: the behavior of fiscal policy over the business cycle; whether it has been coherent with the long-term debt sustainability; and, whether it has been a significant source of macroeconomic volatility. The results are compared internationally. Second, it evaluates the fiscal stance of the Colombian authorities during the 2008 global financial crisis, and examines the adoption of a fiscal rule as an appropriate tool to manage public finances beyond the recovery phase.

Keywords: fiscal policy, business fluctuations, banking crisis, rules vs. discretion

JEL Classification: E62, E32, G21, E69

Suggested Citation

Lozano, Luis I., Fiscal Policy in Colombia and Prospective Analysis After the 2008 Financial Crisis (March 25, 2010). Bank of Italy Occasional Paper, Available at SSRN: https://ssrn.com/abstract=1985207 or http://dx.doi.org/10.2139/ssrn.1985207

Luis I. Lozano (Contact Author)

Banco de la Republica ( email )

Cra. 7 No. 14-78 Piso 12
Bogota
Colombia

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